Settlement Hearing Will Not Have A-List Attendee

(CN) - A federal judge should not have ordered a high-level government official to appear at an initial settlement conference of a tax dispute, the 9th Circuit ruled Wednesday.

While district courts have the power to order officials to attend settlement conferences, that power "is not limitless," The federal appeals court in Pasadena found.

U.S. District Judge Ramona Manglona, in the Northern Mariana Islands, ordered an official with "full settlement authority" to appear at an initial settlement conference between the Internal Revenue Service and John Baldwin who sued to recover some $5 million in taxes.

Manglona three times denied the government's request to sidestep the local rule and send staff attorneys in place of the assistant attorney general for the Tax Division, the lowest-ranking official in the Department of Justice with the authority to approve a settlement that size. The conference was supposed to take place in Coeur d'Alene, Idaho, late last year, but has since been postponed.

Reviewing the government's petition for a writ of mandamus on Wednesday, a three-judge panel found that, in this specific case, the division's case load makes the District Court's requirement "impractical".

"The Department of Justice in general and its Tax Division in particular are responsible for a very large number of cases," Judge Richard Clifton wrote for a three-member panel. "The government reported to us that, as of January 9, 2012, the Tax Division had 549 civil cases pending in which the amount in controversy exceeded $2 million ... the current case being just one of them. It further reported that the Tax Division receives a new civil case involving more than $2 million, on average, every third business day. The Assistant Attorney General is the lowest-ranking government official with authority to settle those claims under the Department's regulations. For her to prepare for and appear at all settlement conferences for all of those cases would be highly impractical, if not physically impossible."

The unanimous panel granted the government's writ and vacated four separate orders.

"We acknowledge the District Court's intention to create a conducive environment for settlement discussions but, at this stage of this case, where there has been no record of dilatory or evasive tactics by either party, the District Court's orders were not justified," Clifton added.

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